final value outside the adjusted values

[Myles Hoffman]

Hi, looking at a appraisal where the appraiser's value falls just outside the range of the adjusted values. When asking the appraiser to discuss this they responded that their is no requirement in USPAP or appraisal theory that the estimated value is bracketed by the adjusted sales prices. This is a Fannie Mae product. I haven't been able to find wording in Fannie Mae SG regarding this. Any thoughts?

 

[CANative]

The appraiser should discuss this in the reconciliation. In my experience it's usually a matter of rounding up. Or the property is a little better than the others, etc.

 

[Pittsburgh Pete]

Is the value well-supported? Someone has to have the most expensive house in the neighborhood--can't penalize someone for that because of some rigid guideline (if in fact one exists).

And what Can said!

 

[AnonApprsr]

There is a plethora of situations where that would be acceptable, OP. Is this one of them? Is it explained in the reconciliation, which you should check as has been said here? Even if it wasn't explained it may still be correct. Look at the Comparable Sales. Perhaps there were no Comparable Sales available that would have "bracketed" the opinion of value.

 

[Thomas Fiehler]

I'm just curious as to how the ADJUSTED value of the comparables will NOT include the appraised value within their range?

 

[Joyce Potts]

How about something other than a stable market? Lets take a declining market. If all your comps contracted and closed within 30-60 days, yet you have competitive, active listings that continue to have their list prices lowered and still have not yet sold, everything else assumed equal, why not include and incorporate the Competitive Listings Analysis into your appraisal, weight it and support your lower value? Or use those listings for a market condition or time adjustment which would bring your adjusted closed sales in line but at the same time, bring down the wrath of the underwriter who is usually clueless.

 

[ddnma]

Hi, looking at a appraisal where the appraiser's value falls just outside the range of the adjusted values. When asking the appraiser to discuss this they responded that their is no requirement in USPAP or appraisal theory that the estimated value is bracketed by the adjusted sales prices. This is a Fannie Mae product. I haven't been able to find wording in Fannie Mae SG regarding this. Any thoughts?

That is just plain stupid.

 

[J Grant]

There is no USPAP requirement to best of my knowledge that subject value be bracketed, and I doubt Fannie has a "rule" though they may suggest it as a guideline. LEnders like to see this and will often ask for an additonal comp that brackets the subject value. The OA did not break any "rules." As a reviewer, is the value supported, did he/she use the best comps/principle of subsitution, was there a higher priced sale that could have been used, and if the higher priced sale was used and adjusted for, would the OMV still be the same?

 

[Lloyd Bonafide]

That is just plain stupid.

For a lending assignment, I would say ditto -

 

[ddnma]

There is no USPAP requirement to best of my knowledge that subject value be bracketed, and I doubt Fannie has a "rule" though they may suggest it as a guideline. LEnders like to see this and will often ask for an additonal comp that brackets the subject value. The OA did not break any "rules." As a reviewer, is the value supported, did he/she use the best comps/principle of subsitution, was there a higher priced sale that could have been used, and if the higher priced sale was used and adjusted for, would the OMV still be the same?

If it is not bracketed by the adjusted prices, what criteria does the appraiser use to conclude to value? Odds are, they missed an adjustment somewhere along the line.

Or it could be like the one I saw a couple of years ago: Sales Comparison: $300,000+-, Cost Approach $600,000+-... final opinion of value: $600,000. "All weight is given to the Cost Approach as the market is in turmoil and there is no reason to penalize the homeowner for outside market influences."....certified residential with over 5 years of experience... go figure